PRIVATE equity group Permira is today in prime position to land Debenhams after the retailer's directors backed a £1.54bn takeover offer.

PRIVATE equity group Permira is today in prime position to land Debenhams after the retailer's directors backed a &#xA3;1.54bn takeover offer.

Bid vehicle Laragrove, backed by Permira, said it was making a recommended cash offer for Debenhams, which values the business at 425p per share.

In a joint statement with Laragrove, the independent directors of Debenhams recommended that shareholders accept the offer.

But they confirmed that discussions were also continuing with a rival consortium made up of investment firm CVC Capital Partners and Texas Pacific Group "which may lead to a higher offer being made for the company".

In the statement, Debenhams said, "In these circumstances, the independent directors believe it is in the best interests of Debenhams and its shareholders to put the (Laragrove) offer forward and recommend unanimously that Debenhams shareholders accept the offer".

The two parties are understood to have spent the weekend locked in talks over the terms and conditions of Laragrove's bid.

One issue thought to be a stumbling block was a so-called "material adverse change clause" which could enable Permira to pull out if there was a deterioration in Debenhams' trading position.

Members of the company's management team, including chief executive Belinda Earl, have worked with Permira on its proposals, as well as co-operating with CVC and Texas Pacific. The CVC party was a late entrant to the takeover race.

It has emerged that Debenhams' independent directors had agreed to pay the CVC consortium up to &#xA3;6m in costs in the hope that it would trump Permira's offer.

Under the Takeover Code, companies are allowed to pay fees of up to 1% of a successful offer to firms considering making a bid.

The group revealed on May 12 that Permira had made an indicative offer of 425p a share, 28% higher than its value at the start of trading that morning.

Charles Sherwood of Permira said the offer was at a "significant premium to the company's average share price over the last year".